PLC Vendors Target Non-manufacturing Markets

Schneider Electric is expanding its distribution base for programmable logic controllers and other automation products, as PLCs extend into new application areas.

An Allen-Bradley PLC is used in this monster truck for gear shift control, enabling the driver to change gears three times in 1.
An Allen-Bradley PLC is used in this monster truck for gear shift control, enabling the driver to change gears three times in 1.

While industrial automation still represents the bulk of the market for programmable logic controllers (PLCs), some vendors are looking toward more sales in non-manufacturing arenas to help supplement growth.

PLCs are increasingly being used for jobs in building automation, telecommunications, pipelines, transportation, warehousing and power distribution stations, for example. And at the low end, so-called nano- and micro-PLCs—thanks to their low price and simplicity—are even being used in applications ranging from car washes and bowling alleys to garage door openers and lawn irrigation systems. “Right now, we’re involved in an opportunity to use nanos in food blenders. That’s how far it’s gone,” notes Karl Newquist, manager of operational marketing for Schneider Electric’s Industrial Automation and Control group, in Raleigh, N.C.

Cashing in

Schneider, for one, is moving to better cash in on the trend. The French company’s North American Operating Division, based in Palatine, Ill., announced recently that it will now supply its line of Telemecanique PLCs and related automation products through its entire Square D distribution channel, the electrical industry’s largest.

That means that PLCs, sold under the company’s Modicon brand, will now be available through some 1,550 distributors throughout the United States and its territories, says Newquist. Until now, Schneider’s U.S. PLC sales have been limited primarily to a group of about 200 distributors in major metropolitan areas that focus on industrial end users, original equipment manufacturers (OEMs) and systems integrators.

Schneider calls the new distribution strategy a response to a growing customer demand for automation products outside of traditional industrial applications. “The market has grown and expanded over the years so dramatically that if we don’t use our strength—the size of our distribution channel—then we’re not going to be able to leverage ourselves into those new, expanding markets,” Newquist explains.

Good strategy

Himanshu Shah, a senior analyst for ARC Advisory Group Inc., a Dedham, Mass.-based research and consulting firm, believes that Schneider’s move to expand PLC distribution is “a very good strategy.” Many in the wider group of Square D distributors may be better attuned to the needs of nontraditional PLC applications, particularly at the low end, than are the more limited group of manufacturing-oriented distributors, who may be more focused on higher level, solutions-oriented business, he says.

Shah co-authored an ARC report last year on the global PLC market, which cited the emergence of non-manufacturing applications as one driver for PLC market growth, together with growing demand in newly industrialized regions such as China and Eastern Europe. That report projected the worldwide PLC market to grow from more than $6 billion in 2003 to more than $7.5 billion by 2008.

At Schneider competitor Rockwell Automation Inc., in Milwaukee, John Nesi says that the use of PLCs in non-manufacturing applications is nothing new. At the high end of the market, Rockwell’s Allen-Bradley line of Logix Programmable Automation Controllers, or PACs, are finding wider use in applications including pipelines and warehousing, says Nesi, who is vice president of commercial marketing for Rockwell’s Automation and Information Control Group.

Monster trucks

“On the low-end stuff, it gets a little bit more diverse, and a little more interesting,” says Nesi. Allen-Bradley PLCs are being used for applications as diverse as medical diagnostic equipment and poultry facilities, to tumble dryers, vending machines, traffic light sequencing, and even motorcycles and monster trucks. But in general, growth in PLC use for nontraditional applications has been “spotty,” Nesi says.

As for the Schneider move to expand PLC distribution, Nesi, not surprisingly, is skeptical. “It will improve their (Schneider’s) market access, sure. But I’m not sure it will improve their market share,” he says. “I came out of the Reliance camp (Reliance Electric, which became part of Rockwell in 1994), and when we tried to sell PLCs through power distribution distributors, we were wildly unsuccessful with it.” The nature of the customer base and the relative competency level for PLC sales by non-mainline industrial automation distributors can be issues, Nesi indicates.

Schneider’s Newquist, however, says the expanded distribution makes a statement to competitors about his company’s plans to leverage its large distributor base to the maximum extent possible to boost PLC and automation product sales. “We think that these added distributors who are now going to sell this product can make a big difference for us in terms of continuing our growth in the automation business,” he concludes.

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